5 Critical Things to Remember When Buying Your First Home

Thinking about becoming a home owner this year? (Perhaps you want to nab the $8,000 first time home buyer tax credit.) If so, take a deep breath and prepare yourself financially and mentally for a rewarding, but challenging, experience. Whether you’ll be buying this month or next year, here are five things you really need to know about buying a home. While you’re at it, check out our mortgage information resource center where we provide more in depth information about becoming a home owner.  

#1. Real Estate Agents and Mortgage Brokers Don’t Work For You

Real estate agents (even buyer’s agents) and mortgage brokers will tell you they are your best friends in the home buying process and that they’re on your side. They’re not. They don’t work for you; they work for themselves. They both get paid almost exclusively on commission. The more you pay for your house and the higher your mortgage rate, the more they take home. I’m not saying that real estate agents and mortgage brokers are going to scam you—many will work with you and help you into the right home and the right mortgage—but you do need to understand how they get paid and understand your limits. Don’t allow yourself to be pressured into a home—or a loan—outside your budget.

#2. Don’t Spend All Your Cash on a Down Payment

Having a down payment saved—hopefully 20%—is more important than ever to qualify for the best mortgages. That said, it’s unwise to spend everything you have just to get into your home. If you do spend all your cash on the down payment, you’ll have a house, but nothing left to make improvements, fix things if they break (and believe me, houses break), or even make your mortgage payments if you lose your job or face other expenses. Keep your down payment savings and your Get no obligation mortgage quotes online. Are you a new home owner? What other advice would you give to others consider buying their first home?

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About David Weliver

David Weliver is the founding editor of Money Under 30. He's a cited authority on personal finance and the unique money issues we face during our first two decades as adults. He lives in Maine with his wife and two children.


  1. Awesome list!

    Re: #1, first time buyers should also know that the lawyer (in states that use a lawyer for closing) doesn’t work for you either. They work for the bank, even though you’re paying them. So, if you ask for anything to be done through closing, make sure that you make it clear (in writing) that you must sign off before the money is dispersed. Otherwise, the lawyer may write checks for work that’s not done… and never *gets* done. (Didn’t happen to me, fortunately.)

  2. That’s a great point, Jessica. I forgot to mention attorneys. I’ve had a few friends really get screwed by their incompetent (or more likely just lazy) real estate attorneys.

  3. Hello Readers! Let me say you should be PREAPPROVED for financing. Preapproval is a step over and above “prequalification,” as you really don’t need a lender or Realtor to do that for you. It’s as simple as knowing how much income you earn and how much debt you have (think the 28/36 rule). If you want to be in the “driver’s seat” when attempting to purchase your first home, secure financing First. You will have more control over what you pay & how you will negotiate with the seller (in other words, more buying and bargaining power). Many sellers will not take you seriously or take their home off market while someone waits for loan approval. So, get it ahead of time!

    Finally, to add to the 1st tip: Buyer agency was established out of an obvious need for buyers to have representation, too. Once you are in a Buyer Agent (Broker) agreement, the Real Estate agent legally works for YOU and has the obligation to ensure that your best interest’s (not theirs or the seller’s) are served.

    Michelle (the wheelady)

  4. hey! thanks for the tips, I’m definitely sending this article to a few friends. I hope to own a condo in the next 1-2 years, so I’m just now researching all the info I’ll need for when I actually start to look. Thank you!!